With investor enthusiasm in artificial intelligence (AI) stocks currently as strong as ever, there's significant interest in new opportunities like Pony AI (PONY 3.87%) stock.
A developer of proprietary software that enables autonomous mobility, Pony AI became one of the latest AI stocks available to investors after the company completed its initial public offering (IPO) in November 2024. Operating a fleet of more than 250 robotaxis, which have amassed a total of about 33.5 million kilometers of autonomous driving mileage, Pony AI also operates a fleet of more than 190 robotrucks.
While the majority of the company's business is in China -- business research firm Frost & Sullivan recognizes it as the sole autonomous driving technology company that has received all available regulatory permits necessary for offering robotaxi services to the public within China's Tier‑1 cities -- it also has operations in Europe, East Asia, and the Middle East, demonstrating a global presence.
Stock
Since the stock is new to the market, potential AI investors surely have plenty of questions, such as whether Pony AI is profitable, whether it pays a dividend, and if there are exchange-traded funds (ETFs) that include it among their holdings.
How to buy
How to buy Pony AI stock?
For those who believe in the merits of going for a ride with Pony AI stock, there are a few simple steps to take.
- Open your brokerage app: Log into your brokerage account where you handle your investments.
- Search for the stock: Enter the ticker or company name into the search bar to bring up the stock's trading page.
- Decide how many shares to buy: Consider your investment goals and how much of your portfolio you want to allocate to this stock.
- Select order type: Choose between a market order to buy at the current price or a limit order to specify the maximum price you're willing to pay.
- Submit your order: Confirm the details and submit your buy order.
- Review your purchase: Check your portfolio to ensure your order was filled as expected, and adjust your investment strategy accordingly.
Should I invest?
Should I invest in Pony AI stock?
Since individual investing goals vary, it's impossible to say categorically whether an investment in Pony AI is right for everyone. However, there are certainly several reasons why investors would find it worthwhile to gain exposure to Pony AI stock. For one, those seeking an AI investment -- or even diversity in the sort of AI investments they have chosen -- will be drawn to the stock. From semiconductor stocks to companies that develop generative AI models, there are various opportunities for AI investments. Pony AI, a developer of proprietary AI software that enables autonomous ability, is yet another option.
Despite the many reasons why Pony AI stock may be alluring for some, there are a couple of reasons that investors may lose interest in it. For one, the company is headquartered in China, where its business is primarily located. Investors interested in minimizing their exposure to China-based stocks will find Pony AI unappealing.
Conservative investors also will likely be uninterested in Pony AI stock. Because the company -- currently unprofitable -- is still in the growth phase of its development, there are a variety of risks associated with an investment, so people looking to minimize their exposure to risk would be better off looking elsewhere.
Profitability
Is Pony AI profitable?
Based on a regulatory filing for the IPO of its American depositary shares, Pony AI was unprofitable in 2022 and 2023. On a gross profit basis, the company is in the black, posting gross profits of $32.1 million and $16.9 million in 2022 and 2023, respectively. The bottom of the income statement, however, tells a different story. The company reported net losses in each of the previous two years: $148.3 million in 2022 and $125.3 million in 2023.
While the company's still reporting a net loss, it's worth noting that it has made headway toward generating profits. For the six-month period ending June 30, 2024, Pony AI reported a net profit margin of negative 209.5%, notably better than the negative 566.3% it posted for the same period in 2023.
Dividend
Does Pony AI pay a dividend?
As of the end of 2024, Pony AI hadn't paid a dividend to shareholders. Between the company's inability to generate both profits and positive operational cash flow -- it reported $154.8 million in 2022 and $115.4 million net cash used in operating activities -- it's highly unlikely that Pony AI will return capital to shareholders by way of dividends anytime soon.
ETFs
ETFs with exposure to Pony AI
Since Pony AI recently appeared on public markets, the stock hasn't yet appeared among the holdings of exchange-traded funds (ETF). Other options exist, however, as there are several artificial intelligence (AI) ETFs that may interest investors.
- KraneShares Electric Vehicles & Future Mobility Index ETF (KARS 0.95%): Concentrating on electric vehicle stocks as well as self-driving car stocks, the KraneShares Electric Vehicles & Future Mobility Index ETF includes Tesla (TSLA -0.7%) as its top holding as well as industry leaders that primarily operate in China like Nio (NIO 0.65%) and Li Auto (LI 2.0%).
- ARK Autonomous Technology & Robotics ETF (ARKQ 1.18%): With Cathie Wood at the helm, the ARK Autonomous Technology & Robotics ETF provides exposure to a variety of disruptive technologies such as autonomous mobility, intelligent devices, and robotics. Tesla is the ETF's largest holding, representing 17% of the portfolio.
- iShares Self-Driving EV and Tech ETF (IDRV 1.05%): Investors committed to self-driving car stock exposure and companies benefitting from the adoption of EVs will find the iShares Self-Driving EV and Tech ETF an option worthy of further investigation. The ETF counts EV industry leaders like Tesla and Rivian (RIVN -5.75%) among its top holdings.
Exchange-Traded Fund (ETF)
Stock split
Will Pony AI stock split?
Companies often decide to split their stocks when they believe that the share price is so high that it's preventing some investors from buying them. There are a variety of upcoming stock splits, but it is incredibly unlikely that Pony AI will be one of them.
Related investing topics
The bottom line on Pony AI
A new option for those interested in self-driving car exposure, Pony AI has already made significant inroads in advancing autonomous mobility in China, Europe, and the Middle East.
Before buying Pony AI stock or an ETF that presents exposure to the autonomous mobility industry, it's important to recognize the ample risks associated with these types of investments. Although Pony AI is generating revenue, there's no guarantee that it will achieve profitability.
FAQ
Investing in Pony AI FAQ
How to buy Pony AI stock?
Investors can buy Pony AI stock by opening their brokerage apps and proceeding with the usual steps for purchasing stocks.
Is Pony AI publicly traded?
Pony AI is available to retail investors. It held its IPO in November 2024.
What is the ticker for Pony AI?
Pony AI is traded on the Nasdaq exchange under the stock ticker PONY.
What does Pony AI do?
Operating a fleet or robotaxis and robotrucks, Pony AI specializes in advancing autonomous mobility solutions.
